Bill Would Give State Unused Gift Card Money
POSTED: 4:08 pm EST February 5, 2009
UPDATED: 4:12 pm EST February 5, 2009
ANNAPOLIS, Md. -- Annapolis lawmakers are introducing a bill that would allow for the collection of money from unspent gift cards to put into the state treasury.
Nationally, gift cards are a $59 billion industry. Experts estimate that 6 percent of gift cards go unspent in Maryland. The bill would allow the state to claim 70 percent of that unused money and use the cash to fund education.
"To me, this is a no-brainer. If you haven't used your gift card for four years, you are not going to use it, and why can't we share? The bill states we keep 70 percent of it, and retailers keep 30 percent," said Delegate Joseline Pena-Melnyk, D-Anne Arundel and Prince George's counties.
Thirty-two states have a similar law. Some of them keep 100 percent of the unspent gift card money, 11 News reporter David Collins said. But state retailers, grocers and the hospitality industry oppose the measure.
"The money belongs to the person. It doesn't belong to the state. It is sort of an indirect taxation -- this bill. This was money that was given to somebody, and if they choose not to spend it in a certain time period, it's still their money," said lobbyist Bruce Bereano.
International consulting firm Towergroup noted in a report that retailers don't generate revenue from gift cards until they are used or declared dormant. However, the money used to purchase the cards generates interest for the business.
The report cited Best Buy as an example. It said the store moved $39 million from liability to income in 2005 due to unredeemed gift cards.
Critics of the legislation are contending that as the bill is written, Maryland retailers wouldn't even get a 30 percent stake. The legal term is called escheat, meaning handing over property to the state.
Originally Posted by linda22003
